• ByBit CEO Ben Zhou clarified that his exchange’s exposure to the bankrupt crypto lender Genesis was restricted to its investment arm Mirana.
• Mirana was reportedly owed $151.5 million, but was collateralized by around $120 million which has already been liquidated.
• Members of the crypto community questioned ByBit’s earn product, which Zhou clarified does not use Mirana.
The crypto world was recently abuzz with news of the bankruptcy filing of Genesis Global, one of the largest crypto lenders. The filing revealed that Mirana, an investment arm of ByBit, was among Genesis’ top five creditors, with an exposure of $151.5 million. This caused some community members to question the security of funds on ByBit’s trading platform.
In response, ByBit CEO Ben Zhou took to Twitter to clarify the situation. He said that Mirana only managed some of ByBit’s assets and that the exchange’s clients’ funds were kept separate. Zhou also stated that ByBit’s earn product does not use Mirana, and that the reported $151 million exposure was collateralized by around $120 million which Mirana had liquidated already.
Although this explanation satisfied some members of the crypto community, others were still skeptical. Kosen Labs CEO Miljan Martic commented that the “numbers don’t add up” and that there was “no proof of anything on (the) blockchain.” Diyan Slavov questioned if ByBit was “running an FTX/Alameda kind of relationship,” while several others requested proof of transactions between the exchange and its investment arm.
Nevertheless, many praised Zhou’s swift response in providing clarity to the matter. ByBit’s CEO was quick to address the community’s concerns, and his response alleviated some of the doubts that were circulating.
In the end, it’s important to remember that crypto is still an immature industry and that issues like these are bound to arise. It’s reassuring to see that ByBit’s team is willing to take the initiative to address these issues and provide transparency to their customers.